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Old 08-20-2012, 05:09 PM
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Efficiency Efficiency is offline
LawnSite Bronze Member
Join Date: Apr 2011
Location: zone 6
Posts: 1,390
buying a book of business is no different than buying any other income producing asset. You have to assess a value on the future cash flow generated from that asset, in this case a bunch of clients.

Questions to help guide this: what is your current and projected new gross margin, net margin, EBITDA. Run worst case, expected, and better than expected numbers through a pro-forma income statement to see what the value TO YOU is.

Dont forget, that unlike the shiny pickup or mower most dont bat an eye at purchasing, this asset actually appreciates in value and will in turn be worth something to your buyer one day too.
If this post seems mean, it's probably because I'm drunk posting. Maybe my next one will be better...
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